The Commission’s proposal anticipates that Rule 14a-4 will be utilized as an alternative to proposals filed under Rule 14a-8, while overlooking the significant barriers that conducting independent solicitations pose for investors. Under the Commission’s proposed model for contested solicitations, firms would be allowed to leave shareholder proposals off of management proxy ballots and automatically count unvoted shares against proposals on a contested ballot, necessitating the solicitation of a higher percentage of shares for shareholder proposals to have any chance of achieving majority support.
The SEC says shareholders will still have a voice through independent solicitations, even as it seeks to rescind Rule 14a-8. Investors filing their own proxy statements is no substitute for access to company ballots. The cost of mailing materials alone makes this "alternative" inaccessible to most shareholders. A right that only a few shareholders can afford to exercise is no right at all.